Barclays Pursues Blockchain Patents to Create Digital Currency Network

Barclays, the UK's biggest financial institution, has actually applied for three U.S. licenses that jointly describe a system that utilizes blockchain innovation to combine the pseudonymity of cryptocurrency with the legacy financial system as well as its KYC/AML program. The London-based financial institution first looked for the 3 patents in July 2016, though they were only published by the U.S. Patent & Trademark Office(USPTO)on Thursday. Produce & Destroy Digital Currency Units

In one patent, Barclays recommends a system that permits specific customers on the network to develop and also ruin systems of electronic money on a blockchain network. Such customers — — probably a central bank or various other monetary institution — — have the ability to modify the money's monetary supply using special “money issuer secret keys,” which allow them to include new units of currency to the network's public journal, and “money destroyer secret tricks,” which license them to eliminate specific units of currency from the journal.

The patent writers describe that such a system might be made use of to permit individuals to down payment funds at a financial institution or various other currency conversion solution as well as convert them right into electronic money, then withdraw them from the ledger later on, all without changing the balance in between the total worth of currency in the electronic money system as well as all other currency systems. To puts it simply, Barclays seems to envision a fiat-pegged stablecoin as the basis for its blockchain network. From the license:

” [ T] he devices of electronic money might be set to any kind of currency unit (as an example, it might be readied to a device of fiat currency, such as United States dollars, Euros, Pounds Sterling, etc), such that the electronic money stands for a different way of keeping and investing fiat currency. This could have benefits because the electronic money will certainly not rise and fall in value versus the fiat money to which it is established.”

The ruin feature might also be used to replace unspent funds referencing older blocks in the ledger with results in brand-new blocks, enabling the journal to discard older blocks as well as reduce the quantity of storage area required to run a node.

This device can be utilized to confiscate funds that come to be linked with other or deceptive criminal tasks. Though this function would be a benefit to establishments worried about conforming with anti-money laundering guidelines, it's very easy to imagine it elevating issues among consumers.

Simply check out the conflict surrounding the capability of EOS block producers to freeze accounts on the recommendation of an independent settlement firm. This function, when hailed as a means to assist individuals recuperate swiped funds and make cryptocurrency more easy to use, has provoked so much argument that also EOS mastermind Dan Larimer has actually recommended modifying the EOS constitution to reduce the authority of block manufacturers to ice up accounts.

Repetitive KYC on a Blockchain

Barclays' suggested blockchain network permits users to gradually undergo one-time KYC confirmation on an as-needed basis. The various other 2

patents rundown exactly how such a blockchain network could be used to boost the protection and efficiency of identification confirmation and also various other processes that entail delicate details. Under the suggested system, one or several 3rd parties can separately or collectively attest the identity or credibility of an additional individual on the network, such as a cryptocurrency purse holder. A timeless instance of this are services that are required by regulation to restrict access to customers above a certain age, such as 18. Needing to execute age verification with every such solution is not only time consuming however additionally makes it most likely that sensitive personal details will certainly fall under the hands of cyberpunks.

In Barclays' suggested system, a customer can ensure insurance claims when conducting purchases on the network — — e.g. that he or she is old sufficient to buy an age-restricted item from a vendor. If the individual has already done age verification with another relied on third celebration — — maybe their key banking organization or another seller — — the vendor could confirm this with the blockchain's “insurance claims tree,” removing the need for them to by hand examine verification claims.

Users can register for cryptocurrency purses on the network with marginal documents as well as only undergo single KYC confirmation as required to negotiate with other users dealing in restricted products or services.

Relying on the sensitivity of this data, confirmed claims might also be cryptographically covered, ensuring that just specific entities can access user information with the network.

Eventually, the financial institution visualizes that such a system can be made use of to confirm the honesty of a myriad of insurance claims, ranging from driving opportunities to credit reliability to the ownership of Internet of Things (IoT) devices and also the permission of these tools to negotiate in electronic money.

Streamlining Banking & & Regulatory Compliance

Nonetheless, Barclays — — a multinational economic organization with tens of countless workers working out of workplaces situated across the world — — says that this system would profit not just customers yet also stars throughout the financial supply chain.

At a fundamental level, banks and merchants would invest less time on KYC/AML conformity, reducing overhead and improving their inner operations. It could likewise improve information protection given that the quantity of individual info held by specific institutions would be much smaller sized compared to currently.

“This may lead to improved safety, far better risk choices as well as a financial opportunity for the functional function that they may currently play in retail and also various other purchases,” the patent writers composed. “Banks in particular could profit by a significant decrease in the processing (e.g. computer system handling) and also financial expenses of preserving systems of record and giving the required examination to others and also regulators.”

The devil, though, remains in the details, and also time will certainly tell whether such a system ever sees the light of day.

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The article Barclays Pursues Blockchain Patents to Create Digital Currency Network appeared initially on CCN.

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